Reining in Prom Expenses

By Jason Alderman

If you've got teenagers, you already know how expensive high school can be. Besides food, clothing and school supplies, a whole host of extracurricular activities are competing for a share of your wallet – even as you frantically try to save for college and your own retirement.

One of the biggest expenses you'll encounter is prom. Gone are the days of borrowing dad's suit and crepe paper streamers in the school gym: Today's proms are often more like a Hollywood premiere with limousines, designer gowns and swanky after-parties.

I'm not kidding. According to a recent nationwide survey conducted by Visa Inc., the average U.S. family with a high school student attending the prom expects to spend $978 this year. Surprisingly, that's down 14 percent from last year's survey average of $1,139 per family.

A few other interesting statistics the survey uncovered:

On average, parents plan to pay for about 56 percent of prom costs, with their kids picking up the remaining 44 percent.

Parents in lower income brackets (less than $50,000 a year) plan to spend an average of $733 – a considerable share of the family budget. Thankfully, that's down significantly from last year's $1,245 estimate.

After-parties can run anywhere from a few bucks at the bowling alley to hundreds of dollars for group hotel suites.

As with weddings and vacations, spending on prom can easily spiral out of control, especially if your teenager isn't used to sticking to a budget. Use this as a learning experience by getting your kid involved making tough decisions, helping to prioritize expenses from vital to non-essential.

To help with the prom budgeting process, Visa launched a free smartphone app last year called Plan'it Prom. You simply enter your budgeted amounts for each item and then track actual spending on your phone or tablet as you shop. The app also includes budgeting tips, a photo gallery and a timeline for tracking pre-prom deadlines. Plan'it Prom is available at the iTunes store, the Google Play store and from www.practicalmoneyskills.com/prom.

Here are a few prom cost-saving ideas:

Shop for formal wear at consignment stores or online. As with tuxedos, many outlets rent formal dresses and accessories for one-time use.

Have make-up done at a department store's cosmetics department or find a talented friend to help out.

Split the cost of a limo with other couples, or drive yourselves.

Team up with other parents to host a pre-prom dinner buffet or after-party.

Take pre-prom photos yourself and have the kids use their cellphones or digital cameras for candid shots at various events.

Bottom line: You want to ensure your child has a memorable high school experience, but not at the expense of your overall budget.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.